Appendix VII

Reports of appointed auditors

Appendix VII contains the reports of appointed auditors when we have not relied on the appointed auditor and the reports of the appointed auditors indicate a matter or issue that should be reported to the Assembly.

Appendix VII does not contain the reports of appointed auditors that indicate a matter or issue to report to the Assembly when we have not done our work. Appendix III contains a list of work not done.

We have reported earlier when we have determined that we were unable to rely on the reports of the appointed auditors.

Crown Agency

Carlton Trail Regional College
Prairie West Regional College
Saskatchewan Indian Regional College

Appointed Auditor

E.J.C. Dudley & Co.
Gilchrist & Co.
Price Waterhouse

Carlton Trail Regional College
for the year ended June 30, 1995. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII - 2

Prairie West Regional College
for the year ended June 30, 1995. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII - 3

Saskatchewan Indian Regional College
for the year ended June 30, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .VII - 4

Provincial Auditor Saskatchewan
1996 Fall Report

VII - 1

CARLTON TRAIL REGIONAL COLLEGE
YEAR ENDED JUNE 30, 1995

We have examined the system of internal control of Carlton Trail Regional College in effect as at June 30, 1995. We did not examine certain aspects of internal control concerning the effectiveness, economy, and efficiency of certain management decision making processes. The criteria for the examination of this system of internal control consisted of the control environment and control systems described in the Canadian Institute of Chartered Accountants Handbook.

Our examination was conducted in accordance with generally accepted auditing standards. Those standards require that we plan and perform an examination to obtain reasonable assurance whether the system of internal control established and maintained by management is sufficient to meet the control objectives referred to below. Such an examination includes obtaining an understanding of the system of internal control and performing tests of controls to determine whether the internal controls exist and operate effectively.

The management of Carlton Trail Regional College is responsible for establishing and maintaining a system of internal control to achieve the control objectives noted in a) to d) below. In fulfilling this responsibility, estimates and judgment by management are required to assess the expected benefits and related costs of control procedures. Pursuant to your responsibilities under section 11(1) of The Provincial Auditor Act, you are required to determine if there is a system of internal control in effect which provides management with reasonable, but not absolute assurance that:

(a) the accounts are faithfully and properly kept to permit the preparation of financial statements in accordance with the appropriate basis of accounting;

(b) all public money is fully accounted for and properly disposed of, and the rules and procedures applied are sufficient to ensure an effective check on the assessment, collection and proper allocation of public money;

(c) transactions are executed in accordance with management's authorization, public money expended is applied to the purpose for which it was appropriated by the Legislature and the expenditures have adequate statutory authority; and

(d) essential records are maintained and the rules and procedures applied are sufficient to safeguard and control public money against loss from unauthorized use or disposition.

Because of the inherent limitations in any system of internal control, errors or fraud may occur and not be detected. Also projection of any evaluation of the system of internal control to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the degree of compliance with the procedures may deteriorate.

In our opinion, based upon the above criteria, the system of internal control of Carlton Trail Regional College in effect as at June 30, 1995, taken as a whole, was sufficient to meet the objectives stated above insofar as those objectives pertain to the prevention or detection of errors or fraud in amounts that would be material in relation to Carlton Trail Regional College, except that it was not readily evident that Variance Analysis of Budget to actual was performed by staff and Board at quarterly intervals as specified by the Regional College Accounting and Reporting Manual.

E.J.C. Dudley & Co.
September 8, 1995

Provincial Auditor Saskatchewan
1996 Fall Report

VII - 2

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PRAIRIE WEST REGIONAL COLLEGE
YEAR ENDED JUNE 30, 1995

I have examined the system of internal control of Prairie West Regional College in effect as at June 30, 1995. I did not examine certain aspects of internal control concerning the effectiveness, economy, and efficiency of certain management decision making processes. The criteria for the examination of this system of internal control consisted of the control environment and control systems described in the Canadian Institute of Chartered Accountants Handbook.

My examination was conducted in accordance with generally accepted auditing standards. Those standards require that I plan and perform an examination to obtain reasonable assurance whether the system of internal control established and maintained by management is sufficient to meet the control objectives referred to below. Such an examination includes obtaining an understanding of the system of internal control and performing tests of controls to determine whether the internal controls exist and operate effectively.

The management of Prairie West Regional College is responsible for establishing and maintaining a system of internal control to achieve the control objectives noted in a) to d) below. In fulfilling this responsibility, estimates and judgement by management are required to assess the expected benefits and related costs of control procedures. Pursuant to your responsibilities under Section 11(1) of The Provincial Auditor Act, you are required to determine if there is a system of internal control in effect which provides management with reasonable, but not absolute, assurance that:

a) the accounts are faithfully and properly kept to permit the preparation of financial statements in accordance with the appropriate basis of accounting;

b) all public money is fully accounted for and properly disposed of and the rules and procedures applied are sufficient to ensure an effective check on the assessment, collection and proper allocation of public money;

c) transactions are executed in accordance with management's authorization, public money expended is applied to the purpose for which is was appropriated by the Legislature and the expenditures have adequate statutory authority; and

d) essential records are maintained and the rules and procedures applied are sufficient to safeguard and control public money against loss from unauthorized use or disposition.

Because of the inherent limitations in any system of internal control, errors or fraud may occur and not be detected. Also, projection of any evaluation of the system of internal control to future periods is subject to the risk that procedures may become inadequate because of changes in conditions, or that the degree of compliance with the procedures may deteriorate.

Our examination disclosed the following conditions in the system of internal control of Prairie West Regional College as at June 30, 1995 which, in my opinion, based upon the above criteria, resulted in more that a relatively low risk that errors in amounts that would be material may occur and not be detected within a timely period.

Provincial Auditor Saskatchewan
1996 Fall Report

VII - 3

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Financial Reporting

In the production of reports for the board and management, the procedure consists of manually transferring balances from the computerized general ledger to a spreadsheet format. No balancing controls exist for the numbers being manually transferred and therefore, there is no confirmation that the numbers being used agree with the actual records. The computer program reporting function is not being utilized.

Since the Board is responsible for College activities, the Board needs to receive timely and reliable information from management to manage and direct the College's activities.

The above condition could result in incorrect decisions by the Board and Management due to faulty information.

The Board should require management to prepare monthly financial statements utilizing the computer software reporting modules which can be integrated with the accounting system.

Gilchrist & Co.
November 15, 1995

Provincial Auditor Saskatchewan
1996 Fall Report

VII - 4

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SASKATCHEWAN INDIAN REGIONAL COLLEGE
YEAR ENDED JUNE 30, 1995

We have made an examination to determine whether the Saskatchewan Indian Regional College complied with the provisions of the following legislative and related authorities pertaining to its financial reporting, safeguarding of assets, spending, revenue-raising, borrowing and investing activities during the year ended June 30, 1995:

The Regional Colleges Act and Regulations
The Department of Finance Act, 1983
The Regional Colleges Accounting and Reporting Manual
The Interpretation Act

Our examination was made in accordance with generally accepted auditing standards and accordingly included such tests and other procedures as we considered necessary in the circumstances.

In our opinion, the Saskatchewan Indian Regional College has not complied with the provisions of the aforementioned legislative and related authorities during the year ended June 30, 1995 in the instances noted below:

Regional Colleges Act and Regulations	Relevant
	section

Not all board members have been appointed by the Lieutenant Governor in Council.	7(1)
There are eleven members on the board instead of the prescribed four to seven. Seven of the members have been approved by the Lieutenant Governor in Council and four are acting without approval.	7(2)
Budgets are not approved by the Minister prior to adoption.	15(2)
The appointment of auditors is not approved by the Minister of Education.	17(1)
Board members can serve for an unlimited length of time instead of the prescribed two terms.	7(5)
The lease of land or buildings is not approved by the Minister of Education.	14(b)
The chairman of the board has served as chairman for more than two consecutive fiscal years.	Reg 4(1)
The college's personnel policy has not been approved by the Minister of Education.	Reg 7(4)
Regional Colleges Accounting and Reporting Manual
The carrying value of capital assets is reduced by a depreciation charge through the balance sheet with a corresponding charge to the recorded equity in capital assets.
The college has not included a payment listing with their audited financial statements.
Interpretation Act
Per diem amounts and reimbursements paid to Board members were in excess of amounts authorized by Order-in-Council for the college.	16

Price Waterhouse September 12, 1995

Provincial Auditor Saskatchewan
1996 Fall Report

VII - 6

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SASKATCHEWAN INDIAN REGIONAL COLLEGE
YEAR ENDED JUNE 30, 1995

We have examined the financial statements of the Saskatchewan Indian Regional College for the year ended June 30, 1995 and have issued our report dated September 12, 1995 thereon. We have examined the system of internal control as at June 30, 1995 and have issued our report to you dated September 12, 1995. We have also made an examination to determine whether the Saskatchewan Indian Regional College complied with specified legislative and related authorities pertaining to its financial reporting, safeguarding of assets, spending, revenue-raising, borrowing and investing activities during the year ended June 30, 1995 and have issued our report to you dated September 12, 1995.

Our examinations were made in accordance with generally accepted auditing standards, and accordingly included such tests and other procedures as we considered necessary in the circumstances. In those instances, if any, that our study and evaluation of internal control disclosed conditions indicating that internal controls were inadequate or not complied with, substantive tests were performed to detect any cases in which: (1) any officer or employee of the Saskatchewan Indian Regional College has wilfully or negligently omitted to collect or receive public money belonging to the Crown; (2) there has been a deficiency or loss to the Crown through the fraud, default or mistake of any person; and (3) an expenditure was made which was not properly vouchered or certified.

Our examination disclosed the following matters that should be brought to your attention:

- Per diem amounts and reimbursements to Board members were in excess of amounts authorized by Order in Council for the college. Also, the expenses of four unapproved Board members were paid. The unauthorized Board expenses paid during the year amounted to approximately $40,000.

- Per diem amounts and reimbursements were paid to Board members of a related organization (SITAG) in the amount of approximately $18,000.

- Certain payments were made during the year which do not appear to be of an educational nature. These payments totalled approximately $7,100.

- The college has not complied with a Public Accounts Committee recommendation requiring it to disclose all payments of $2,500 or more.

Price Waterhouse
September 12, 1995

Provincial Auditor Saskatchewan
1996 Fall Report

VII - 7

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Appendix VII

Table of Contents